{"id":53779,"date":"2022-08-15T02:54:38","date_gmt":"2022-08-15T07:54:38","guid":{"rendered":"https:\/\/fullfocus.co\/?p=53779"},"modified":"2022-10-03T13:35:42","modified_gmt":"2022-10-03T18:35:42","slug":"8-value-accelerators-to-maximize-your-companys-market-value","status":"publish","type":"post","link":"https:\/\/fullfocus.co\/8-value-accelerators-to-maximize-your-companys-market-value\/","title":{"rendered":"8 Value Accelerators to Maximize Your Company’s Market Value"},"content":{"rendered":"

For most business owners, their single largest personal asset is their business. If you ever intend to sell your business\u2014or need to sell it\u2014you\u2019ll want to maximize its value to prospective buyers. Being deliberate about this process is essential to getting the most out of the transaction.<\/span><\/p>\n

But even if you don\u2019t intend to sell your business, it\u2019s a good idea to build it as if you were going to do so. Why? For one, you might change your mind later. For another, you might end up in a situation where you don\u2019t have a choice. But mostly, it\u2019s just a good idea to build your business as if you\u2019re going to sell. You and your company will benefit from this mindset, even if you never do end up selling.\u00a0<\/span><\/p>\n

Over the course of my forty-plus year career, I\u2019ve bought or sold more than a dozen businesses. Those transactions ranged in size from $1 million to $500 million. In every case but two, I worked with investment bankers or business brokers who\u2019ve overseen the sale of hundreds of businesses. I learned from them what to do and what not to do.<\/span><\/p>\n

Basically, the more buyers at the table, the better. Competition drives up the purchase price. Here are eight value accelerators that will maximize the value of your business and make it uber-attractive to prospective buyers.<\/span><\/p>\n

Value Accelerator 1: Determine an exit date.<\/b>\u00a0<\/span><\/h4>\n

Begin with the end in mind. This will inform everything you do from this point forward. Even if you don\u2019t plan to exit, this will put you in a position where you could sell if you had to in an emergency. Nothing focuses your effort like a deadline.<\/span><\/p>\n

Value Accelerator 2: Remove yourself from the business.<\/b>\u00a0<\/span><\/h4>\n

Start thinking about this now. Nothing will suppress the company\u2019s value like making it <\/span>dependent on you<\/span><\/a>. As a good friend once told me, \u201cEgo is dilutive to net worth.\u201d In other words, the more dependent the business is on you, the less it will be worth.<\/span><\/p>\n

Value Accelerator 3: Build a <\/b>dream team<\/b><\/a>.<\/b>\u00a0<\/span><\/h4>\n

Prospective buyers rarely want to run your business. Instead, they want a turnkey operation with an outstanding management team in place. This is one more thing that reduces risk and makes their lives easier.<\/span><\/p>\n

Value Accelerator 4: Focus on key financial metrics.<\/b>\u00a0<\/span><\/h4>\n

The value of your business is typically going to be a multiple of your trailing 12 month\u2019s EBITDA. You want to focus on EBITDA as a net number and as a percentage of net revenue. This latter one is important, because prospective buyers don\u2019t want you extracting profit at the expense of investing in the business.<\/span><\/p>\n

Value Accelerator 5: Identify your proprietary advantage.<\/b>\u00a0<\/span><\/h4>\n

This is how you build a moat around your castle, so it\u2019s impenetrable by the competition. This could take the form of copyrighted intellectual property; trademarked brands, products, or services; or patents\u2014or some combination of all three. It could also be a process that differentiates you from the competition.<\/span><\/p>\n

Value Accelerator 6: Diversify your customer portfolio.<\/b>\u00a0<\/span><\/h4>\n

Dependency on one customer or customer class adds risk to prospective buyers. You need to reduce that risk by <\/span>diversifying<\/span><\/a> your customer portfolio.<\/span><\/p>\n

Value Accelerator 7: Diversify your product suite.<\/b>\u00a0<\/span><\/h4>\n

This is just like your customer portfolio. You don\u2019t want a business that depends on one product or service. You also don\u2019t want a hodgepodge of products that don\u2019t really go together. There has to be some internal logic that explains how the parts work with each other.<\/span><\/p>\n

Value Accelerator 8: <\/b>Recession-proof<\/b><\/a> your business.<\/b>\u00a0<\/span><\/h4>\n

You need to consider what happens to your business in recession. Do sales decrease or increase? You need to be honest with yourself. If they decrease because customers see them as nonessential, you need to find a way to make them essential.<\/span><\/p>\n

Depending on the industry you\u2019re in, not all these value accelerators may be relevant, or you may need to consider others. Regardless, I\u2019d encourage you to embark on this journey now. It\u2019s going to take time to build into your business those attributes that make it as attractive as possible to prospective buyers. Taking steps in this direction will make your business more profitable, more predictable, and less risky. That\u2019s good for everyone\u2014you, your employees, your customers, and your vendors.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Building your business’s market value benefits you, your employees, and your clients, even if you don’t plan on selling.\u00a0Here’s how.<\/p>\n","protected":false},"author":8,"featured_media":53783,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[50,34],"tags":[85,49,38,1725,1560,296],"acf":[],"yoast_head":"\n8 Value Accelerators to Maximize Your Company's Market Value | Full Focus<\/title>\n<meta name=\"description\" content=\"Building your business's market value benefits you, your employees, and your clients, even if you don't plan on selling.\u00a0Here's how.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fullfocusplanner.com\/8-value-accelerators-to-maximize-your-companys-market-value\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta 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